Sucharita Kodali of Forrester Research joins us to talk about the unfortunate demise of Toys 'R Us and her new book, "Toys 'R Bust: Reasons One of the Country’s Most Revered Retailers Collapsed".
About Sucharita Kodali
Sucharita is a retail analyst at Forrester Research with a focus on online retail and technology.
She once worked at Toys"R"Us and is writing a book called "Toys R Bust" chronicling the rise and fall of the retail giant.
Half the pay and a third of the productivity
The Container Store theorizes that one great employee is worth three good ones, so they choose to pay 50-100% higher wages for their salespeople.
Because of seasonal hiring and low pay at Toys"R"Us, there were low quality employees that were poorly trained and unmotivated.
In a grocery setting, this results in errors like zucchinis in the cucumber pile.
Many employees at Toys"R"Us were trained singularly and were unable to fill gaps and needs as challenges arose.
Rewriting the fall of Toys"R"Us
Sucharita counters the notion that private equity ruined Toys"R"Us. They had been in a tailspin for years before private equity entered the equation.
Toys"R"Us struggled to compete against a certain Seattle behemoth.
After their deal with Amazon severed, Toys"R"Us moved to GSI's platform.
Writing a more perfect Toys"R"Us
Could they have adopted a more customer-centric experience like Bonobos or Warby Parker?
Could a more boutique shopping experience integrated with ecommerce fulfillment have worked?
Despite a large array of interesting products in the toy market, Toys"R"Us received 50% of its inventory from just 20 vendors.
Amazon Prime Day
It was shocking to see an outage on Amazon's site, let alone on Prime Day.
There were more sign-ups on Prime than on any other day prior.
Amazon seems to play by its own rules. Despite a bad first impression, they still had a huge day of sales and signups. This says a lot about their brand trust.
Speaking of Trust...
Is Amazon at risk of being affected by anti-trust laws?
Europe is cracking down. Will this reach the US?
Marketplaces are incredibly easy to sell and there is not a lot of recourse or quality control right now. Many third-party sellers make false claims or deliver counterfeit product. Legislation could affect this soon.
Magento, an Adobe Company
Adobe is a major force in the digital world, but they lacked ecommerce presence.
Adobe's acquisition of Magento expands their reach much further.